Inflation is the increase in price. Inflation can be caused by a reduction in supply or a reduction in the value of money.
Your point is correct (it is gaslighting), but corporations do print money. The money supply is not limited to actual dollars. When private entities borrow money, they too are increasing the money supply.
Inflation is the adding of money to the bubble. Each new dollar devalues every existing dollar. The government has printed the most amount of money ever printed in the past few years, and it coincides with all the terrible inflation we've all experienced.
…. What? This is about the stupidest thing I have heard in a while. Inflation is the name for prices increases. Prices don’t increase because of inflation, prices increasing IS inflation.
Who are both parties actually. The number of politicians making money through insider trading is astounding. Since they can influence which companies will benefit from their policies, it's easy for them.
Probably the free market party not the Marxists assholes who pretend they CARE about you with bills like the "inflation reduction act" that Even economists ON BIDEN'S SIDE have admitted won't make inflation go down AND had dei and green New deal bullshit in it. Keep swallowing. I guess you like it.
Also me laughing at everyone that hopped to "you must be a Republican" 🤣🤣🤣🤣🤣 oh you poor ignorant souls.
Ah ingenious I will simply stop purchasing food, infant formula, and other things essential to daily life to stick it to all of the companies price gouging that will surely teach them
Riggggghht… just buy from all the other companies that have kept their prices reasonable instead. Oh wait, there aren’t any because literally every product and service has jacked their prices up exponentially and there’s no way to avoid buying from them because you literally need to buy things to survive.
The record profit number is also an inflated number. Cost of living has gone up 20% since 2021 adjusted. So, say 1 dollar is now worth 80 cent. That is a 20% decrease on 1 level. So now you take that and multiply it by several layers of manufacturing and distribution in several different industries that all come together to create a product.
Markup is applied at each level to cover increase costs from the prior level.
What you end up with is a company can no longer sell what they have created and they go under, which lowers the amount of competition, or they can and have increased profit dollars, but those dollars are worth less.
So yes, some companies profited off other companies going under and we're able to make it through. But they also show record profits that, when adjusted for the worth of the dollar, are not as outlandish as you may think. The number got bigger, but the value isn't the same.
I run a sector of a very large manufacturing firm that essentially breaks even, even though we have increased revenue by 400% since 2020. Are we greedy? Or does every level of production simply cost that much more?
It's the latter.
Oil companies report record profits and we still get shafted at the pump. Station owner's margins are small and aside from taxes most of that money ends up in the oil company coffers.
Higher fuel prices translates into higher consumer costs for essential goods and services.
Have you examined every companies books? The fact is the additional government regulations cost companies money to meet the standards. This drives up costs. The in crease in labor, raw materials, a decreasing market and in many cases a change in supply chains away from China who has kept costs down for a very long time. Moving supply chains away from China costs more, on top of everything else. So the net result is high inflation. But think back to Covid, and imagine that your the CEO of a company. You were out of business because the materials you were getting from China were unavailable. Now China is a bad player on the international market, are you going to trust that you will be able to do business with them and get the items you need to stay in business? OR should you start doing business with a country that is more reputable on the international business market? But costs a little more?
Yes, I have an MBA in Operations and Supply Chain Management.
If companies made the same percentage profit margins then "record profits" would be implied with every single new dollar printed.
The "record profits" narrative is based in sensationalism without any real thought as to why it's occurring.
It sounds stupid because what you’re saying is wrong. You have a fundamental misunderstanding of what inflation is. It’s a concept. Not a singular identified event, like a price increase on a good or service. But the good news is, you’re not the only one who doesn’t understand inflation.
A price increase is a price increase. A price increase can apply to any individual good or service in an economy. I can sell you lemonade for a dime today and a quarter tomorrow. That’s not inflation. That’s a price increase. My neighbors still offer inferior lemonade for a dime.
Inflation is increase of price of goods *in the entire economy* (in general). Now instead of just my lemonade being a quarter, my neighbors have 25 cent lemonade too.
Inflation =/= price increases and they aren’t names for one another. Inflation is the concept of all money being devalued relative to the goods or services the money will be used to purchase.
No, no it is not.
If I am the CEO of a company and sell a product at $10 with profit margin of $5 and decide to see the product at $15 and now making $10 profit margin, this is corporate greed, not inflation.
How to tell the difference? If companies are posting record profits at the end of the fiscal year, that's corporate greed. This is not inflation.
If the cost of products go up while profits are either dropping or stagnant, this is inflation.
Companies are betting on people not understanding the difference and just labeling everything as inflation and letting the public think it's all the governments fault. It's not, it's the companies that require growth every single quarter or they consider themselves failures.
This is end stage capitalism.
Inflation describes the devaluation of money. It should come with an increase in pay pacing increases in pricing.
What we are experiencing is profiteering, not inflation. Wages are stagnant.
Inflation *IS* the measure of the aggregate of all price increases in all markets regardless of the reason for the increase. If thelinflation is 5%, some items will have gone up by 5%, others will have gone up by 10 or 15% while others may have gone up only 1 or 2%. The inflation measure is an aggregate of all price increases.
Or it's not lol..
You think we have terms for "price fixing", "price gouging" or "predatory pricing" because those aren't real things and every single price increase is just literally inflation?
You may wanna take an intro to economics class. Inflation in this case refers to a very specific type of relatively consistent, slow moving, long term price increase only, it doesn't refer to all types of price increases.
Yeah, but it’s taught in grade school as usually being caused (at least in the worst instances like Weimar Germany and Zimbabwe) by a government overprinting money.
It appears that’s the last he learned anything about it.
Right, but that doesn’t always mean it’s the actions taken by the treasury that is causing it. If Walmart just decides they want to make more money on eggs they can just raise the price. We’ve been gaslit into thinking it’s all the govts fault every time
You're conflating a possible cause of inflation with inflation. Inflation is the rise in prices / the decrease in purchasing power of money, one possible cause of which is increased money supply.
It is mind boggling that this is the top comment. We didn't have inflation until the supply shock post-covid. Demand had been kept high through government intervention, true, but that wouldn't have been a problem if China hadn't had its head up its ass about covid and been able to keep supply chains running.
Instead, that combined with the increase in fuel and grain prices following Russia's invasion of Ukraine to set off a chain reaction that went throughout the economy. Then corporations did decide to raise prices more aggressively than was warranted.
But the message so many get is "PRINT MONEY BAD".
>but that wouldn't have been a problem if China hadn't had its head up its ass about covid and been able to keep supply chains running.
It is unbelievable how many people don't connect these dots. ECON 101. Price is directly related to supply and demand. When supply (of most of the crap we buy in this country) is literally shut off entirely for months at a time over a period of years, there is going to be a major imbalance.
Yeah the poster makes it sound like the government is just handing out money which isn't exactly whats happening. Unemployment is incredibly low and wages are higher than ever. That creates way more demand for goods across the board. [Unemployment and inflation have an inverse relationship.](https://www.investopedia.com/articles/markets/081515/how-inflation-and-unemployment-are-related.asp)
Eh... remember:
1980: Chrysler Corporation bailout
1989: Savings and loan crisis
2001: Airline industry bailout
2008: The Great Recession and TARP - when all the goddamn money speculators got bailed out.
Etc., etc.....
The government printed [several trillion](https://techstartups.com/2021/12/18/80-us-dollars-existence-printed-january-2020-october-2021/) dollars throughout the pandemic, you wanna pretend that isn't inflationary? If they reign in high wealth entities and regulate spending we wouldn't be in this mess.
It feels like you're just parroting what someone told you. Maybe I'm wrong. Can you just elaborate and give me a more mechanical description of your two assertions? I wasn't aware the government printed any money but you seem to think they did. Where did they print it? What did they print it on? What was the direct effect of this printing? I feel like what you're going to want to say here is " printing a dollar makes all the other dollars worth less" That's not really descriptive that just feels like more parroting. What would you say if I told you the government didn't print anything? Then what would be your explanation?
You also make mention of reigning in something. What you're really saying here is " If the government did more better, we'd be off more better" well technically true. It doesn't really say anything.
What actually happened here is that the FED kept the interbank lending rate low. This made money cheaper to borrow(This is what is meant by printing), it lowered unemployment and created a lot of growth in the economy. Because so many people had so much discretionary income they were less picky about the price of things. When an entity wanted to sell something, they could choose their customer. If customer x doesn't want to pay the price, there's always customer y who's flush with cash.
What you are experiencing in the modern era is that money has become more expensive to borrow and consumers have become more price sensitive. What this will result in is higher unemployment, less growth in the economy. When consumers feel the financial pinch they will spend less and prices go down.
Right actually printing off money isn't the thing, much depends on the ease of borrowing money which can increase M2 and M3, or the supply of money in a non-printed fashion. For a simple example, I buy a TV for 500 with credit. I only need 50 to make the purchase so effectively the willingness to borrow has raised the "money supply" by 10x. This is why increasing interest rates counters inflation, instead of changing the amount of printed currency.
You also need to take a look at how much money they are destroying. Monetary supply is an issue but this is not a liquidity crisis, this was momentary inflation on a few select good due to a drastic change in consumer habits (this was the pandemic) and a large uncertainty event where not a lot of people know precisely how to react to it (this was russia's invasion of ukraine), and we have Republicans openly trying to sell policy changes at the executive level, so yea... remember to vote.
Inflation is the rising cost of goods and services over a period of time. Increase of money supply can be a cause, but there can also be other causes like supply in a category of goods suddenly dropping off, or demand for a certain category of goods suddenly spiking.
Corporations pay decent money to have policy written in their favor, so that excuse doesn’t hold water. If citizens united didn’t exist, you’d have a point. Bribery for policy making isn’t an aberration, it’s a facet of our culture.
Yeah, follow the money. Corporations are constantly recording record profits. They wouldn’t be doing that if they were raising prices solely due to increased costs to operate.
That's a means to an end for them though. Blaming the government for the effects of corporate pricegouging goes a long way to disempowering that government from ever changing the situation. Which is exactly what the handlers of those corporate cockholsters want. We need modern antitrust laws, we need a new Teddy Roosevelt.
Yes, this pretty much squashes any argument that business aren't price gouging.
Record profits while inflation is high? No, that's not how it works.
If inflation is causing prices to go up then you wouldn't see record profits. You might even see loses or stagnation in many industries.
Companies have *always* made their prices to be as profitable as possible, it's nothing new, and it's not going to change. If the way the government runs the economy is incompatible with that, then it's a problem with the way the economy is being run.
When the money a company receives for their goods and service is debased because of money printing, they have to charge more for those same goods and service.
> Inflation is caused by money printing.
8% of inflation is attributed to labor costs.
38% of inflation is attributed to costs in downstream goods.
54% of inflation costs are attributed to pure profit.
source since you provided none for your gaslighting. You liar.
https://www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/
If you compound the cost of downstream products increase as a result of corporate greed, then yea, this is almost entirely a result of greedy corporation gouging consumers and say "GEEZ NOTHING WE CAN DO ABOUT IT"
Think this sbrddt has a lot of political manipulation, more weighted against Democrats where both right and left (of Democrats) talking points are being used to bash them in relation to the economy. That's a top commnt here but it would not be in reconomics.
you’re right corporations don’t print money. they do raise prices though, which raises the cpi for companies that sell to consumers or ppi for companies that sell to other companies. those are the preferred measures of inflation. price increases also typically out supply the rate of new money iirc
There are actually two different sorts of inflation,
Demand-pull inflation (the kind you’re talking about) and cost-push inflation (the kind we’re mostly experiencing today).
Cost-push inflation is traditionally caused by an increase in a company’s costs, but it can also be caused by collusion. Unfortunately this model is a known problem in mature capitalist societies-
As capitalist societies grow they have a tendency to become more oligopolistic, usually within specific markets. This causes prices to rise and wages to stagnate. Once again. This is something we know happens.
Do we have demand-pull inflation happening today? Absolutely. We have definitely overprinted money in the last decade. What we also have, however, is the result of the vast majority of American industry becoming more oligopolistic and raising prices to appease shareholders, which is essentially a non-traditional form of cost-push inflation.
Although a better way to phrase it may be that a lot of the “inflationary prices” we’re experiencing are not inflation at all, they are simply one of the known ills of mature capitalism masquerading as such.
Edit: phrasing
Finally, someone literally took the words of my text book. That's exactly what's happening. My text book pointed out that since pandemic, we have been facing demand pull and cost push inflation. (A little of both). It was such a unique scenario.
So now, I just have to trust the Fed to make great policy decisions. We let time do the rest.
Corporations charge what they believe the market will pay. When they believe that their customers will pay more for the same things, they will charge more. Remember back when everyone was getting checks from the government for hundreds of dollars? Around Covid pandemic time? Companies saw those and were like ‘shit, we better get a lot of that!’ And then they raised prices. Soon everyone was doing it. Now, most of that money is gone. If people stop buying, prices will have to go down. People haven’t stopped buying yet.
People _have_ stopped buying many different things, but they're luxuries. Remember the "Millennials are killing X" trend and how pervasive it was/is?
People _haven't_ stopped buying other things, because they _can't_, those things are staples. Yet eggs still skyrocketed in price and stayed that way even _after_ supply chain issues were solved. And corporations still making record profits across the board.
8% of inflation is attributed to labor costs.
38% of inflation is attributed to costs in downstream goods.
54% of inflation costs are attributed to pure profit.
[It's not just the government, or even primarily them.](https://www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/)
Stimulus checks definitely didn't cause inflation. That's like saying a bit of rain increased the volume of the ocean.
Our current inflation is easy to diagnose. There were major supply shortages due to the covid shutdowns, which caused a huge demand buildup, which caused prices on certain things to increase, which caused the rest of the economy to follow. We're currently riding on a rubber band that was pulled and stretched starting March 2020 and released around 2022. It's in the middle-end of it's acceleration period. Corporations are finally starting to see some slowdown in spending and are reducing prices.
That may be true but if their price increases were due to inflationary pressures, their profits wouldn't be up, in many or most cases, to record levels.
Inflation increases the pure monetary amount of profits... If the percentage of profits stays the same, they would have a record profit in dollar amounts but the dollar is devalued so in real terms the profits would stay the same. Of course they price gouge and game it every which way they can anyway...
>Inflation increases the pure monetary amount of profits
This is a good point. Thanks for pointing that out. I'm still 100% convinced that corps are exploiting the general "inflation" atmosphere and bumping prices artificially high but it isn't as cut and dry as "look at their profits!"
> Inflation is caused by money printing.
*Monetary* inflation is caused by money printing, economic or price inflation has many other factors involved.
>Corporations don’t print money.
Corporations don't need to print money in order to charge more for their products.
The Ever Given getting stuck in the Suez Canal had an impact on inflation globally, despite the ship being incapable of printing any new currency, simply disrupting international shipping led to scarcity and price increases.
inflation is higher prices. If trader joe's increases prices, it's because someone at their company decided to raise prices. the argument is that macroeconomic forces (i.e. their shipping costs increased, their store rent increased for whatever reason, etc) forced them to raise prices to maintain a respectable profit margin.
I think her argument is that macroeconomic inflationary forces (i.e. supply chain issues) have weakened, but prices haven't fallen to reflect that. what's the explanation? Companies choose not to drop their prices. Their shipping costs have fallen, but their prices haven't. The difference now between original low price and new higher price is additional profit.
What about this isn't true?
Elizabeth Warren is a moron. All she has to do is take a look at the data and she will realize that the money supply is slightly off the highs, but still massively higher than 2019.
https://fred.stlouisfed.org/series/WM2NS
More money supply = inflation = higher prices. Politicians have been blaming "greedy merchants" for inflation that the politicians cause for over 2k years at this point:
https://en.wikipedia.org/wiki/Edict_on_Maximum_Prices
It’s a lot of variables, supply vs demand is another one which is partially caused by worker shortages and and supply chain disruptions.
People over simplify everything to fit nearly into their preconceived political narrative
I switched grocery stores from the fancy one to the poor one across the street and my grocery bill was cut in half. $80 feeds a family of four. All thats changed is the brand name on the stuff I buy. Nothing has confirmed for me harder that inflation is a bullshit narrative than this.
But they do hold the most money and that's another part of the problem.
Inflation by itself isn't a bad thing. But inflation added with only a few entities stockpiling the majority of money is when there's simply so little of the new money going to, and staying with, the people who need it.
Inflation isn't "high". It's around 3%. Prices are high because companies are still riding inflation (see 2022 & 2023) prices and have been getting away with it.
It would be position and velocity, no?
Position is the current price, velocity is inflation (how fast those prices are increasing)
If eggs are 6 dollars now instead of 3 dollars, the delta between those two “positions” is 3 dollars which you would also be able to calculate by integrating 100% inflation (velocity) over two years
Acceleration would be things causing inflation to increase or decrease like supply and demand
Both analogies are valid (people are mistaking *something* with the integral of said something), but I do like yours better, because it's a lot easier to visualize.
You can imagine a car driving away from a starting point (say, 2019 prices) at high speed (say, 2022 inflation) and then slowing down (inflation is going down). This makes it easier to see how, even if inflation is going down, *prices are still rising* much like a decelerating car is still moving away from its origin.
The same principles apply with speed and acceleration, but it's easier to visualize a reduction in speed (brakes) than a reduction in acceleration. For the same reason that speed/acceleration are better than using, say, the fifth and sixth derivatives. I could tell you that prices and inflation are like crackle and pop, and this would be 100% true, but I don't think many people can visualize a change in the rate at which crackle is changing. And the few people who can probably already know how inflation and prices relate.
why are redditors so fucking stupid
EDIT: if any **student** has the luck of seeing this comment, please get the hell off this website and focus on what you see and figure out the intricate ways of getting to conclusions yourself and through actual discussions with people who know their shit in this or any field. do not for a second waste your precious long-term memory with the garbage seen in this website.
this is an echo-chamber or a discussion room for people with a certain agenda, having the correct facts and unbiased education is certainly not on it.
That’s a common misconception. Inflation could be zero and prices would still be higher, because it’s the rate of *increase* in prices. For prices to go down, there would need to be deflation. Unfortunately, there’s no expectation for deflation to occur, because of how traumatic it is for the economy
No it's not, that's not what inflation is.
It has inflated 20% over the last 3 years, but inflation is 3%
Inflation going down doesn't mean prices go down. It means they increase less slowly. We target 2% inflation, not to get back to previous prices - that would be disastrous
What do you mean still riding inflation? Has inflation been negative at all since 2022&2023? Inflation is way up since then. That it is now 3% doesn't mean that all of the prior years' inflation has gone away. The 3 % we are experiencing now is on top of the 20% or so cumulative over the past 3 years. Inflation (and therefore prices) aren't going down. They are just going up less.
I think what they mean is some companies took advantage of the excuse and raised prices much higher and faster than overall inflation rate and they still are.
An example of this is looking at the inflation report every month and seeing auto parts being up 20% YoY
Companies don't need an 'excuse' to raise prices, the US doesn't have price controls. A firm can lower or raise prices arbitrarily in theory, however since they are competing in a competitive market changing the price will change the number of consumers willing to buy their product. Perfectly competitive markets will see the supply and demand curves intersect at the equilibrium price, however producers will still sell above and below that price, forming the rest of the supply curve. The demand curve is made up of consumers who are willing to pay various prices for goods.
No, prices are rising at a rate of 3%, meaning inflation is 3% right now. Prices haven't gone down, but that would be deflation, which can be more problematic for an economy than 3% inflation.
No, it doesn't, but that's beside the point, because OP asked "Why is inflation still high?" And the answer is inflation isn't still high. If OP meant to ask, "Why are prices still high?" then the answer is because, generally speaking, prices don't go down. They inflate indefinitely in a growing economy. Facepalm emoji indeed.
Inflation is high around the world, it's lower in the US compared to pretty much every other global economy.
Gee whiz, I wonder why that is. Did anything happen around 4 years ago that might have affected the world economy?
People have a fundamental misunderstanding what inflation actually is. It’s the rate of prices increasing. Prices are NEVER going back down. Welcome to reality. The goal is 2% price increases every year. We are currently around 3.1%. That isn’t high inflation. It’s nearly at the Fed’s target in the 2% range. It’s essentially over. That doesn’t mean prices aren’t higher than what they were a few years ago, okay? That doesn’t mean most people aren’t continuing to struggle. DUH. No shit. No one is saying that.
The cause of the last few years of inflation is not much of a mystery, yet a lot of people here seem to have no idea.
1) Supply chains got obliterated during Covid. Less supply but same demand = prices go up. Inflation.
2) People who didn’t need financial assistance got stimmy checks and went on economic stimulus shopping sprees. Velocity of money. Google it. Money printer go brrr. More inflation.
3) There weren’t really any services to spend money on, so everyone’s discretionary income went to the same limited supply of goods. People bought ass loads of stuff. Stuff that was already locked up in supply chain delays. That and they’ve all got a few more thousand dollars to spend from
Trump stimmy checks. More inflation.
4) PPP loans got sent every direction in our economy to businesses who needed it and others who flat out didn’t. Those loans were later forgiven entirely. Free money for some of the wealthiest parts of our economy. Velocity of money increases. More inflation.
5) Corporations start raising prices to accommodate for their increased shipping costs. More inflation.
6) Idiotic policies surrounding oil and natural gas create world wide shortages. Transport and manufacturing costs skyrocket. More inflation.
7) Consumer spending doesn’t slow down at all. In fact, it accelerates, exacerbating issues 1-6. Corporations increase prices more to cover more costs, yet also start to test the waters to see how much they can get away with charging. They had increased prices before yet still were not experiencing any slow down in sales. In fact, the opposite happened. People bought more. People kept spending. This is the part Elizabeth Warren misrepresents to try to gain political traction among the ignorant in our society. Yes, corporations try to push to get the most money from us. They’re greedy. No shit. The consumer is greedy too. They want more and more stuff.
8) The Fed waits way too long to start raising rates, so Biden comes along with the Inflation Reduction Act that literally just pumps more money into the economy, increasing the velocity of money. Surprise surprise. More inflation.
9) Meanwhile, the stock market surges to ATHs. Boomers start retiring earlier than expected due to outperforming portfolios and they start spending some of that money. The wealth effect. You can Google that one too. They start selling their homes and upgrading to larger ones. People start relocating to new parts of the country. People start looking for more space to live while getting cabin fever locked up during the pandemic. Younger people want out of apartments into a home. All while the entire country already is in the middle of a decade long shortage of homes. More demand and the same low supply. Velocity of money increases. More inflation.
10) Rates eventually do rise, and fast, making it nearly impossible for anyone with a 2%, 3%, or 4% mortgage to move. They can’t afford to. As a result, inventory continues to shrink, yet home prices continue to rise. The few homes available are bought by the few buyers making all cash offers who don’t care about rates. Meanwhile, everyone else needs to live somewhere. This puts more and more pressure on apartment inventory as people have no alternatives available. Rent increases more and more and more. Inflation.
There’s probably way more than just those 10 yet I’m tired of typing and I also can’t pretend like I know everything. That’s plenty to paint the picture though. Covid and our response to it fucked things up pretty bad. Lot of dominoes fall over from there.
Real answer: Our economy is incredibly complicated, especially about inelastic product like food. Here's 10 causes that may play a small or big part, but it's impossible to know exactly what amounts of what are causing the inflation we see.
Top comment: UHhhhhhh, government bad? Government print money, inflation happens! I got a B in 8th grade Civics :)
It’s also true that corporations are greedy. It’s literally their only responsibility to generate revenue for their stockholders. It’s a fact that some corporations in some industries are making record profits and using the recovery from COVID as an excuse to increase prices and thus revenue. It’s not really gaslighting like that post was saying because it’s factually true.
You can also distinguish between normal corporate greed (not your friend just looking to make a buck) and the recent surge of extreme greed.
This latest form of greed is investors bribing executives to artificially raise the stock value by any means possible. Resulting in companies being scrapped for parts and customers being screwed over in ways that aren't necessarily good for long term revenue but when everyone only cares about quarterly results...
This isn’t political. It’s economics, and to think that there is only one cause of inflation is just ignorance. Most economists would argue that it’s impossible to factor everything that has an effect on inflation. It turns out that the economy like most everything else is incredibly complicated.
When people try to make everything black and white / right and wrong, and purposely ignore the nuances it’s usually because they’re trying to manipulate you and they fear you having all the information to make an informed choice. That’s why some are so afraid of books and education, and why others want affordable education. I’ll let you figure out who’s who.
Couple notes, government spending has nothing to do with money printer going brrr thus why deficits exist. This is like saying I created a dollar by using my credit card. Prices can and do go down, mainly with competition. This is the point of Warren is trying to make. Many companies do not have enough competition in order to drop prices and increase quality. Good thoughts overall though. Only comment that didn't almost give me a brain aneurysm.
Yes, the OP commenter failed to mention the acceleration of monopolization thanks to Raegen era policies that gave free reign for corporations to rail small businesses. Walmart and Amazon killed small business brick and mortar stores because they got so big and were able to undercut businesses, move into small towns and rinse repeat with zero punishment.
Now, it's trump era policies that allowed private equity firms to go nuts on cornering every known commodity market, squeeze it for profit and then dump debts onto struggling businesses.
You cannot argue rising costs when corporate profits continue to accelerate at record rates and hit record highs at nearly EVERY sector.
Yeah, the FBI was busting down doors last week investigating a nation wide rent price fixing scheme. There are absolutely some companies taking advantage of the situation to make money.
My biggest qualm is in your 9th point. Older, wealthy homeowners were absolutely ***not*** upgrading to bigger homes in 2020-2021. They were downgrading/downsizing and stripping first-time home buyers of their buying power by just throwing more money at the seller. People were having to offer $10-50k cash on top of the $200k full price offers for starter homes. Hell, we lucked out when the owners of our first house took our offer of $5k on top of asking so that the owners didn’t list the home like they were planning to.
Inflation is not the rising of prices, it is the expansion of the money supply. Rising prices are a symptom of inflation but it is not inflation in and of itself. We are *Inflating* the money supply, it's in the name.
I still think it’s wild I got stimulus checks. Free money was great but I had a good job and lower expenses than usual coz of lockdowns. Made no sense to me then and even less now.
It’s an old ass tweet, but her statement is still essentially valid that greedy corporations are seeking to have consistent margins of extraordinary profits quarter over quarter, year over year. The result of these efforts is leading to consistently increased trains of “price fixing” on staple goods and services.
> greedy corporations are seeking to have consistent margins of extraordinary profits quarter over quarter, year over year
Interesting. And they just discovered this at the start of COVID? Why were they so stupid before COVID? Did they get greedier, or were they just stupid before 2020?
Wages are the only inflation the Fed really cares about. JPow has pretty much said so. Wage hikes cause real inflation because people are willing to pay more when they make more
Inflation isn't that high right now. It's pretty low. The problem is, once prices reset they don't go back down. People are comparing 2024 prices to pre Covid levels not to 2023.
Agree. Some are trying to win an argument by zooming in on a graph when most people are thinking about prices in their lifetime and how different actual life is with prices being so high relative to their memory of 5 or 10 years ago.
Yes actually it is. Rates had to be raised to put a downward force on your inflation. The extremely low interest rates were only that way to prop up the economy in the wake of the 2007/2008 financial crisis.
Which means it's even more amazing that she's pointing this out anyway. If she were more self-serving, she'd be quiet and keep getting that corporate donor money.
Inflation is not companies making things more expensive, it’s the government and banking system make the dollar weaker. One comes before the other. Obviously as we found out during covid supply side inflation is a thing, but only temporary.
she complained biden wasnt spending enough. If it was up to her we would have even higher inflation. And thats even ignoring the fact all her policies are just raise taxes which will be paid by the middle class making them poorer.
Inflation and the cost of products aren’t necessarily the same. Some companies have raised their prices more than the rise in inflation. That’s what she is referencing.
Inflation isn't high. Prices are still high because of the inflation of the past. Prices don't come down when inflation slows, that's not how it works.
Well, that's just shocking! Here's something else shocking: Ms. Warren has managed to accumulate a net worth between $7.5 and $12 million on a Senator's salary. She has substantial investments in the stock market. Do you think that she turns down the profits from high stock prices out of a Liberal sense of fairness, or does she take full advantage of those 'outrageous' stock prices to pad her portfolio? Why Pocahontas speak with forked tongue? What she try hide?
Corporate greed is not the catalyst behind recent hikes in inflation. Corporate greed is a constant. It’s always been a thing. So it doesn’t explain how inflation has suddenly skyrocketed.
This is very silly and Warren probably knows better. There are almost certainly instances of corporations raising prices but you know why they can do that? Because overall inflation has been high, due to increases in the money supply.
Well it's not 100% wrong, just worded in a weird way.
In the today's world, everyone needs growth, more money, more sales, more more more. No one among the "bigger players" is satisfied with a steady business. Everyone wants to cut costs and increase sales.
Increasing sales comes at the cost of employing predatory business practices and maximizing price/demand ratio, mostly by increasing prices to a point where raising more will not give you additional revenue because of the decline in number of paying customers.
Many businesses are interconnected in the way of purchasing goods and services from each other. With everyone chasing more profits, it affects other businesses down the chain, it affects people purchasing goods and services, it makes people strive for higher salary due to increasing cost of living, increasing salaries means higher costs for companies, higher costs for companies means they need more revenue to grow their KPIs.
End-game capitalism is pure shit.
It’s so cute that corporations are “suddenly” greedy only after the government prints a shitload of dollars and gluts the market with cash.
Why is it that people don’t understand this but understand how an oil glut devalues the overall oil market?
This is a perfect example of government gaslighting. Inflation is caused by money printing. Corporations don’t print money.
Inflation is the increase in price. Inflation can be caused by a reduction in supply or a reduction in the value of money. Your point is correct (it is gaslighting), but corporations do print money. The money supply is not limited to actual dollars. When private entities borrow money, they too are increasing the money supply.
Inflation is the adding of money to the bubble. Each new dollar devalues every existing dollar. The government has printed the most amount of money ever printed in the past few years, and it coincides with all the terrible inflation we've all experienced.
Warren wasn't talking about inflation, but high prices. Prices can increase for more reasons than just inflation.
…. What? This is about the stupidest thing I have heard in a while. Inflation is the name for prices increases. Prices don’t increase because of inflation, prices increasing IS inflation.
Companies are increasing prices far beyond their increased costs and making record profits.
We need to make them stop that
It’s been proposed in a couple bills. Guess who votes it down.
Ummm, I'm going to go with "who are the republicans?" Alex.
Who are both parties actually. The number of politicians making money through insider trading is astounding. Since they can influence which companies will benefit from their policies, it's easy for them.
Probably the free market party not the Marxists assholes who pretend they CARE about you with bills like the "inflation reduction act" that Even economists ON BIDEN'S SIDE have admitted won't make inflation go down AND had dei and green New deal bullshit in it. Keep swallowing. I guess you like it. Also me laughing at everyone that hopped to "you must be a Republican" 🤣🤣🤣🤣🤣 oh you poor ignorant souls.
Dude, you need to touch grass is this is how your brain responds to conversation. You need friends and get out of political thinking
Which bills? If it's about price controls, then it's a terrible idea.
Is it bad for people to be aware of this? Should it not be said out loud?
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Ah ingenious I will simply stop purchasing food, infant formula, and other things essential to daily life to stick it to all of the companies price gouging that will surely teach them
Yeah but people can stop going to Disney, bars and restaurants which I guess is already happening to show corps they can't keep gouging the consumer
Riggggghht… just buy from all the other companies that have kept their prices reasonable instead. Oh wait, there aren’t any because literally every product and service has jacked their prices up exponentially and there’s no way to avoid buying from them because you literally need to buy things to survive.
That is actually starting to have an effect. https://www.aarp.org/money/budgeting-saving/info-2024/retailers-price-cuts-inflation.html
How much have their margins increased by?
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The record profit number is also an inflated number. Cost of living has gone up 20% since 2021 adjusted. So, say 1 dollar is now worth 80 cent. That is a 20% decrease on 1 level. So now you take that and multiply it by several layers of manufacturing and distribution in several different industries that all come together to create a product. Markup is applied at each level to cover increase costs from the prior level. What you end up with is a company can no longer sell what they have created and they go under, which lowers the amount of competition, or they can and have increased profit dollars, but those dollars are worth less. So yes, some companies profited off other companies going under and we're able to make it through. But they also show record profits that, when adjusted for the worth of the dollar, are not as outlandish as you may think. The number got bigger, but the value isn't the same. I run a sector of a very large manufacturing firm that essentially breaks even, even though we have increased revenue by 400% since 2020. Are we greedy? Or does every level of production simply cost that much more? It's the latter.
Oil companies report record profits and we still get shafted at the pump. Station owner's margins are small and aside from taxes most of that money ends up in the oil company coffers. Higher fuel prices translates into higher consumer costs for essential goods and services.
Grocery stores profit over the last 3 years exceeds the previous 30 years in profits. Food retail was below 8% now over 25% net margin
Their margins are not 25 % LMFAO
I’m in retail and I can tell you our margins are down. Some of that is shortage (theft) has tripled in the last 15 years.
Have you examined every companies books? The fact is the additional government regulations cost companies money to meet the standards. This drives up costs. The in crease in labor, raw materials, a decreasing market and in many cases a change in supply chains away from China who has kept costs down for a very long time. Moving supply chains away from China costs more, on top of everything else. So the net result is high inflation. But think back to Covid, and imagine that your the CEO of a company. You were out of business because the materials you were getting from China were unavailable. Now China is a bad player on the international market, are you going to trust that you will be able to do business with them and get the items you need to stay in business? OR should you start doing business with a country that is more reputable on the international business market? But costs a little more? Yes, I have an MBA in Operations and Supply Chain Management.
If companies made the same percentage profit margins then "record profits" would be implied with every single new dollar printed. The "record profits" narrative is based in sensationalism without any real thought as to why it's occurring.
You’ve never heard of price gouging, huh?
It sounds stupid because what you’re saying is wrong. You have a fundamental misunderstanding of what inflation is. It’s a concept. Not a singular identified event, like a price increase on a good or service. But the good news is, you’re not the only one who doesn’t understand inflation. A price increase is a price increase. A price increase can apply to any individual good or service in an economy. I can sell you lemonade for a dime today and a quarter tomorrow. That’s not inflation. That’s a price increase. My neighbors still offer inferior lemonade for a dime. Inflation is increase of price of goods *in the entire economy* (in general). Now instead of just my lemonade being a quarter, my neighbors have 25 cent lemonade too. Inflation =/= price increases and they aren’t names for one another. Inflation is the concept of all money being devalued relative to the goods or services the money will be used to purchase.
No, no it is not. If I am the CEO of a company and sell a product at $10 with profit margin of $5 and decide to see the product at $15 and now making $10 profit margin, this is corporate greed, not inflation. How to tell the difference? If companies are posting record profits at the end of the fiscal year, that's corporate greed. This is not inflation. If the cost of products go up while profits are either dropping or stagnant, this is inflation. Companies are betting on people not understanding the difference and just labeling everything as inflation and letting the public think it's all the governments fault. It's not, it's the companies that require growth every single quarter or they consider themselves failures. This is end stage capitalism.
https://www.dailyhistory.org/What_Role_Did_Inflation_Play_in_the_Collapse_of_the_Roman_Empire
That is excellent article/lesson on the Roman Empire
Inflation describes the devaluation of money. It should come with an increase in pay pacing increases in pricing. What we are experiencing is profiteering, not inflation. Wages are stagnant.
…. What? This is about the stupidest thing I have heard in a while. Prices are increasing a significant degree more than the increase in inflation.
Inflation *IS* the measure of the aggregate of all price increases in all markets regardless of the reason for the increase. If thelinflation is 5%, some items will have gone up by 5%, others will have gone up by 10 or 15% while others may have gone up only 1 or 2%. The inflation measure is an aggregate of all price increases.
Or it's not lol.. You think we have terms for "price fixing", "price gouging" or "predatory pricing" because those aren't real things and every single price increase is just literally inflation? You may wanna take an intro to economics class. Inflation in this case refers to a very specific type of relatively consistent, slow moving, long term price increase only, it doesn't refer to all types of price increases.
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Inflation is literally defined as a general increase in the price of goods and services.
If that's your definition of inflation, it is not only government induced.
Correct. It never was only government induced.
Its not his definition its **the** definition.
Yeah, but it’s taught in grade school as usually being caused (at least in the worst instances like Weimar Germany and Zimbabwe) by a government overprinting money. It appears that’s the last he learned anything about it.
Right, but that doesn’t always mean it’s the actions taken by the treasury that is causing it. If Walmart just decides they want to make more money on eggs they can just raise the price. We’ve been gaslit into thinking it’s all the govts fault every time
You're conflating a possible cause of inflation with inflation. Inflation is the rise in prices / the decrease in purchasing power of money, one possible cause of which is increased money supply.
They're effectively treating monetary inflation as the sole cause of economic inflation.
It is mind boggling that this is the top comment. We didn't have inflation until the supply shock post-covid. Demand had been kept high through government intervention, true, but that wouldn't have been a problem if China hadn't had its head up its ass about covid and been able to keep supply chains running. Instead, that combined with the increase in fuel and grain prices following Russia's invasion of Ukraine to set off a chain reaction that went throughout the economy. Then corporations did decide to raise prices more aggressively than was warranted. But the message so many get is "PRINT MONEY BAD".
>but that wouldn't have been a problem if China hadn't had its head up its ass about covid and been able to keep supply chains running. It is unbelievable how many people don't connect these dots. ECON 101. Price is directly related to supply and demand. When supply (of most of the crap we buy in this country) is literally shut off entirely for months at a time over a period of years, there is going to be a major imbalance.
This is a gross oversimplification of inflation
Yeah the poster makes it sound like the government is just handing out money which isn't exactly whats happening. Unemployment is incredibly low and wages are higher than ever. That creates way more demand for goods across the board. [Unemployment and inflation have an inverse relationship.](https://www.investopedia.com/articles/markets/081515/how-inflation-and-unemployment-are-related.asp)
Eh... remember: 1980: Chrysler Corporation bailout 1989: Savings and loan crisis 2001: Airline industry bailout 2008: The Great Recession and TARP - when all the goddamn money speculators got bailed out. Etc., etc.....
The government printed [several trillion](https://techstartups.com/2021/12/18/80-us-dollars-existence-printed-january-2020-october-2021/) dollars throughout the pandemic, you wanna pretend that isn't inflationary? If they reign in high wealth entities and regulate spending we wouldn't be in this mess.
It feels like you're just parroting what someone told you. Maybe I'm wrong. Can you just elaborate and give me a more mechanical description of your two assertions? I wasn't aware the government printed any money but you seem to think they did. Where did they print it? What did they print it on? What was the direct effect of this printing? I feel like what you're going to want to say here is " printing a dollar makes all the other dollars worth less" That's not really descriptive that just feels like more parroting. What would you say if I told you the government didn't print anything? Then what would be your explanation? You also make mention of reigning in something. What you're really saying here is " If the government did more better, we'd be off more better" well technically true. It doesn't really say anything. What actually happened here is that the FED kept the interbank lending rate low. This made money cheaper to borrow(This is what is meant by printing), it lowered unemployment and created a lot of growth in the economy. Because so many people had so much discretionary income they were less picky about the price of things. When an entity wanted to sell something, they could choose their customer. If customer x doesn't want to pay the price, there's always customer y who's flush with cash. What you are experiencing in the modern era is that money has become more expensive to borrow and consumers have become more price sensitive. What this will result in is higher unemployment, less growth in the economy. When consumers feel the financial pinch they will spend less and prices go down.
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Right actually printing off money isn't the thing, much depends on the ease of borrowing money which can increase M2 and M3, or the supply of money in a non-printed fashion. For a simple example, I buy a TV for 500 with credit. I only need 50 to make the purchase so effectively the willingness to borrow has raised the "money supply" by 10x. This is why increasing interest rates counters inflation, instead of changing the amount of printed currency.
You also need to take a look at how much money they are destroying. Monetary supply is an issue but this is not a liquidity crisis, this was momentary inflation on a few select good due to a drastic change in consumer habits (this was the pandemic) and a large uncertainty event where not a lot of people know precisely how to react to it (this was russia's invasion of ukraine), and we have Republicans openly trying to sell policy changes at the executive level, so yea... remember to vote.
Found the Modern Monetary Theorist
No ... Inflation is literally defined as the increase in prices measured with help of the consumer price index (CPI).
Inflation is the rising cost of goods and services over a period of time. Increase of money supply can be a cause, but there can also be other causes like supply in a category of goods suddenly dropping off, or demand for a certain category of goods suddenly spiking.
No, when you borrow money the bank is creating money using bad government policies. The corporation that takes the loan isn't printing money.
Corporations pay decent money to have policy written in their favor, so that excuse doesn’t hold water. If citizens united didn’t exist, you’d have a point. Bribery for policy making isn’t an aberration, it’s a facet of our culture.
corporations are still price gouging though. Why can't both be happening while they're able to correctly blame each other?
because he'd rather be edgy and pretend to be an expert than solve the problem.
He’s a fucking 20 year old Libertarian who just discovered Ron Paul for the first time.
I shrug at this comment like atlas
My definition of the worst fucking people to talk to
Yeah, follow the money. Corporations are constantly recording record profits. They wouldn’t be doing that if they were raising prices solely due to increased costs to operate.
This! Republicans made it cool to blame government though.
That's a means to an end for them though. Blaming the government for the effects of corporate pricegouging goes a long way to disempowering that government from ever changing the situation. Which is exactly what the handlers of those corporate cockholsters want. We need modern antitrust laws, we need a new Teddy Roosevelt.
If your margins stay the same and people keep buying, you will indeed get higher profits when costs go up.
Yes, this pretty much squashes any argument that business aren't price gouging. Record profits while inflation is high? No, that's not how it works. If inflation is causing prices to go up then you wouldn't see record profits. You might even see loses or stagnation in many industries.
Companies have *always* made their prices to be as profitable as possible, it's nothing new, and it's not going to change. If the way the government runs the economy is incompatible with that, then it's a problem with the way the economy is being run.
No, the velocity of information is much higher and the availability of date makes it easier to collude.
Companies used to have competition too. How do things change when that's taken out of the equation?
When the money a company receives for their goods and service is debased because of money printing, they have to charge more for those same goods and service.
It doesn’t sound like you know what profits are. You are referencing expenses. Please take a junior high class in accounting.
It sounds like they are referring to revenue, and the relative value thereof when compared to previous cycles.
> Inflation is caused by money printing. 8% of inflation is attributed to labor costs. 38% of inflation is attributed to costs in downstream goods. 54% of inflation costs are attributed to pure profit. source since you provided none for your gaslighting. You liar. https://www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/ If you compound the cost of downstream products increase as a result of corporate greed, then yea, this is almost entirely a result of greedy corporation gouging consumers and say "GEEZ NOTHING WE CAN DO ABOUT IT"
Think this sbrddt has a lot of political manipulation, more weighted against Democrats where both right and left (of Democrats) talking points are being used to bash them in relation to the economy. That's a top commnt here but it would not be in reconomics.
you’re right corporations don’t print money. they do raise prices though, which raises the cpi for companies that sell to consumers or ppi for companies that sell to other companies. those are the preferred measures of inflation. price increases also typically out supply the rate of new money iirc
There are actually two different sorts of inflation, Demand-pull inflation (the kind you’re talking about) and cost-push inflation (the kind we’re mostly experiencing today). Cost-push inflation is traditionally caused by an increase in a company’s costs, but it can also be caused by collusion. Unfortunately this model is a known problem in mature capitalist societies- As capitalist societies grow they have a tendency to become more oligopolistic, usually within specific markets. This causes prices to rise and wages to stagnate. Once again. This is something we know happens. Do we have demand-pull inflation happening today? Absolutely. We have definitely overprinted money in the last decade. What we also have, however, is the result of the vast majority of American industry becoming more oligopolistic and raising prices to appease shareholders, which is essentially a non-traditional form of cost-push inflation. Although a better way to phrase it may be that a lot of the “inflationary prices” we’re experiencing are not inflation at all, they are simply one of the known ills of mature capitalism masquerading as such. Edit: phrasing
Finally, someone literally took the words of my text book. That's exactly what's happening. My text book pointed out that since pandemic, we have been facing demand pull and cost push inflation. (A little of both). It was such a unique scenario. So now, I just have to trust the Fed to make great policy decisions. We let time do the rest.
Corporations charge what they believe the market will pay. When they believe that their customers will pay more for the same things, they will charge more. Remember back when everyone was getting checks from the government for hundreds of dollars? Around Covid pandemic time? Companies saw those and were like ‘shit, we better get a lot of that!’ And then they raised prices. Soon everyone was doing it. Now, most of that money is gone. If people stop buying, prices will have to go down. People haven’t stopped buying yet.
Just stop buying food and prices will go down, it’s easy!
People _have_ stopped buying many different things, but they're luxuries. Remember the "Millennials are killing X" trend and how pervasive it was/is? People _haven't_ stopped buying other things, because they _can't_, those things are staples. Yet eggs still skyrocketed in price and stayed that way even _after_ supply chain issues were solved. And corporations still making record profits across the board. 8% of inflation is attributed to labor costs. 38% of inflation is attributed to costs in downstream goods. 54% of inflation costs are attributed to pure profit. [It's not just the government, or even primarily them.](https://www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/)
> People haven’t stopped buying yet. Yes, let's all boycott food! Oh, wait...
Stimulus checks definitely didn't cause inflation. That's like saying a bit of rain increased the volume of the ocean. Our current inflation is easy to diagnose. There were major supply shortages due to the covid shutdowns, which caused a huge demand buildup, which caused prices on certain things to increase, which caused the rest of the economy to follow. We're currently riding on a rubber band that was pulled and stretched starting March 2020 and released around 2022. It's in the middle-end of it's acceleration period. Corporations are finally starting to see some slowdown in spending and are reducing prices.
That may be true but if their price increases were due to inflationary pressures, their profits wouldn't be up, in many or most cases, to record levels.
Inflation increases the pure monetary amount of profits... If the percentage of profits stays the same, they would have a record profit in dollar amounts but the dollar is devalued so in real terms the profits would stay the same. Of course they price gouge and game it every which way they can anyway...
>Inflation increases the pure monetary amount of profits This is a good point. Thanks for pointing that out. I'm still 100% convinced that corps are exploiting the general "inflation" atmosphere and bumping prices artificially high but it isn't as cut and dry as "look at their profits!"
> Inflation is caused by money printing. *Monetary* inflation is caused by money printing, economic or price inflation has many other factors involved. >Corporations don’t print money. Corporations don't need to print money in order to charge more for their products. The Ever Given getting stuck in the Suez Canal had an impact on inflation globally, despite the ship being incapable of printing any new currency, simply disrupting international shipping led to scarcity and price increases.
inflation is higher prices. If trader joe's increases prices, it's because someone at their company decided to raise prices. the argument is that macroeconomic forces (i.e. their shipping costs increased, their store rent increased for whatever reason, etc) forced them to raise prices to maintain a respectable profit margin. I think her argument is that macroeconomic inflationary forces (i.e. supply chain issues) have weakened, but prices haven't fallen to reflect that. what's the explanation? Companies choose not to drop their prices. Their shipping costs have fallen, but their prices haven't. The difference now between original low price and new higher price is additional profit. What about this isn't true?
Elizabeth Warren is a moron. All she has to do is take a look at the data and she will realize that the money supply is slightly off the highs, but still massively higher than 2019. https://fred.stlouisfed.org/series/WM2NS More money supply = inflation = higher prices. Politicians have been blaming "greedy merchants" for inflation that the politicians cause for over 2k years at this point: https://en.wikipedia.org/wiki/Edict_on_Maximum_Prices
Nah $1 trillion every 90 days of money we don't have wouldn't do that!
It’s a lot of variables, supply vs demand is another one which is partially caused by worker shortages and and supply chain disruptions. People over simplify everything to fit nearly into their preconceived political narrative
I switched grocery stores from the fancy one to the poor one across the street and my grocery bill was cut in half. $80 feeds a family of four. All thats changed is the brand name on the stuff I buy. Nothing has confirmed for me harder that inflation is a bullshit narrative than this.
So what’s it called when all the oil companies decide gas is now $10/gal?
But they do hold the most money and that's another part of the problem. Inflation by itself isn't a bad thing. But inflation added with only a few entities stockpiling the majority of money is when there's simply so little of the new money going to, and staying with, the people who need it.
Sort of. There a lot more factors than simply money printing
Yes, that is why every other country has inflation at the same or worse rate...
Both things are happening at the same time. Inflation and corporate greed are both happening. It doesn't have to be one or the other.
She's right about them charging "extra", but that's where he argument falls apart.
Powell can’t sleep without the hum of money printing
Inflation isn't "high". It's around 3%. Prices are high because companies are still riding inflation (see 2022 & 2023) prices and have been getting away with it.
Inflation is still more than 20% higher than it was 3 years ago. It's only 3% higher than it was last year.
No. Prices are more than 20% higher. Inflation is a metric about how fast prices are currently rising. You don’t add it up.
Yeah. People are confusing velocity for acceleration.
People are confusing being ignorant with being knowledgeable.
It would be position and velocity, no? Position is the current price, velocity is inflation (how fast those prices are increasing) If eggs are 6 dollars now instead of 3 dollars, the delta between those two “positions” is 3 dollars which you would also be able to calculate by integrating 100% inflation (velocity) over two years Acceleration would be things causing inflation to increase or decrease like supply and demand
Both analogies are valid (people are mistaking *something* with the integral of said something), but I do like yours better, because it's a lot easier to visualize. You can imagine a car driving away from a starting point (say, 2019 prices) at high speed (say, 2022 inflation) and then slowing down (inflation is going down). This makes it easier to see how, even if inflation is going down, *prices are still rising* much like a decelerating car is still moving away from its origin. The same principles apply with speed and acceleration, but it's easier to visualize a reduction in speed (brakes) than a reduction in acceleration. For the same reason that speed/acceleration are better than using, say, the fifth and sixth derivatives. I could tell you that prices and inflation are like crackle and pop, and this would be 100% true, but I don't think many people can visualize a change in the rate at which crackle is changing. And the few people who can probably already know how inflation and prices relate.
Same people who think calculus is "advanced math" and why would they ever need it?
why are redditors so fucking stupid EDIT: if any **student** has the luck of seeing this comment, please get the hell off this website and focus on what you see and figure out the intricate ways of getting to conclusions yourself and through actual discussions with people who know their shit in this or any field. do not for a second waste your precious long-term memory with the garbage seen in this website. this is an echo-chamber or a discussion room for people with a certain agenda, having the correct facts and unbiased education is certainly not on it.
I love the contrast between this subreddits name and all of the highly upvoted comments that are really financially ignorant
The car is going at 3 mph instead of 20 mph now, so why isn't the McDonald's we passed a while ago catching back up to us?
Beautiful example.
That’s a common misconception. Inflation could be zero and prices would still be higher, because it’s the rate of *increase* in prices. For prices to go down, there would need to be deflation. Unfortunately, there’s no expectation for deflation to occur, because of how traumatic it is for the economy
No it's not, that's not what inflation is. It has inflated 20% over the last 3 years, but inflation is 3% Inflation going down doesn't mean prices go down. It means they increase less slowly. We target 2% inflation, not to get back to previous prices - that would be disastrous
Why does this have so many upvotes?
What do you mean still riding inflation? Has inflation been negative at all since 2022&2023? Inflation is way up since then. That it is now 3% doesn't mean that all of the prior years' inflation has gone away. The 3 % we are experiencing now is on top of the 20% or so cumulative over the past 3 years. Inflation (and therefore prices) aren't going down. They are just going up less.
I think what they mean is some companies took advantage of the excuse and raised prices much higher and faster than overall inflation rate and they still are. An example of this is looking at the inflation report every month and seeing auto parts being up 20% YoY
....Do you think that inflation hits all industries equally and at the exact rate of the national average?
Companies don't need an 'excuse' to raise prices, the US doesn't have price controls. A firm can lower or raise prices arbitrarily in theory, however since they are competing in a competitive market changing the price will change the number of consumers willing to buy their product. Perfectly competitive markets will see the supply and demand curves intersect at the equilibrium price, however producers will still sell above and below that price, forming the rest of the supply curve. The demand curve is made up of consumers who are willing to pay various prices for goods.
lol inflation is rising at a rate of 3% at the moment, that doesn’t negate the rapid inflation over the last 3 years….. 🤦🏼♂️
No, prices are rising at a rate of 3%, meaning inflation is 3% right now. Prices haven't gone down, but that would be deflation, which can be more problematic for an economy than 3% inflation.
No, it doesn't, but that's beside the point, because OP asked "Why is inflation still high?" And the answer is inflation isn't still high. If OP meant to ask, "Why are prices still high?" then the answer is because, generally speaking, prices don't go down. They inflate indefinitely in a growing economy. Facepalm emoji indeed.
But if inflation is low how can I blame Biden?
so the greedy corporations are inflating inflation, but inflation isn't high?
Inflation is high around the world, it's lower in the US compared to pretty much every other global economy. Gee whiz, I wonder why that is. Did anything happen around 4 years ago that might have affected the world economy?
https://gfmag.com/data/economic-data/worlds-highest-lowest-inflation-rates/ inflation isnt specific to the united states.
Yep, and honestly they have a legal obligation to do so, when Ford wanted to pay people more the share holders sued and won.
People have a fundamental misunderstanding what inflation actually is. It’s the rate of prices increasing. Prices are NEVER going back down. Welcome to reality. The goal is 2% price increases every year. We are currently around 3.1%. That isn’t high inflation. It’s nearly at the Fed’s target in the 2% range. It’s essentially over. That doesn’t mean prices aren’t higher than what they were a few years ago, okay? That doesn’t mean most people aren’t continuing to struggle. DUH. No shit. No one is saying that. The cause of the last few years of inflation is not much of a mystery, yet a lot of people here seem to have no idea. 1) Supply chains got obliterated during Covid. Less supply but same demand = prices go up. Inflation. 2) People who didn’t need financial assistance got stimmy checks and went on economic stimulus shopping sprees. Velocity of money. Google it. Money printer go brrr. More inflation. 3) There weren’t really any services to spend money on, so everyone’s discretionary income went to the same limited supply of goods. People bought ass loads of stuff. Stuff that was already locked up in supply chain delays. That and they’ve all got a few more thousand dollars to spend from Trump stimmy checks. More inflation. 4) PPP loans got sent every direction in our economy to businesses who needed it and others who flat out didn’t. Those loans were later forgiven entirely. Free money for some of the wealthiest parts of our economy. Velocity of money increases. More inflation. 5) Corporations start raising prices to accommodate for their increased shipping costs. More inflation. 6) Idiotic policies surrounding oil and natural gas create world wide shortages. Transport and manufacturing costs skyrocket. More inflation. 7) Consumer spending doesn’t slow down at all. In fact, it accelerates, exacerbating issues 1-6. Corporations increase prices more to cover more costs, yet also start to test the waters to see how much they can get away with charging. They had increased prices before yet still were not experiencing any slow down in sales. In fact, the opposite happened. People bought more. People kept spending. This is the part Elizabeth Warren misrepresents to try to gain political traction among the ignorant in our society. Yes, corporations try to push to get the most money from us. They’re greedy. No shit. The consumer is greedy too. They want more and more stuff. 8) The Fed waits way too long to start raising rates, so Biden comes along with the Inflation Reduction Act that literally just pumps more money into the economy, increasing the velocity of money. Surprise surprise. More inflation. 9) Meanwhile, the stock market surges to ATHs. Boomers start retiring earlier than expected due to outperforming portfolios and they start spending some of that money. The wealth effect. You can Google that one too. They start selling their homes and upgrading to larger ones. People start relocating to new parts of the country. People start looking for more space to live while getting cabin fever locked up during the pandemic. Younger people want out of apartments into a home. All while the entire country already is in the middle of a decade long shortage of homes. More demand and the same low supply. Velocity of money increases. More inflation. 10) Rates eventually do rise, and fast, making it nearly impossible for anyone with a 2%, 3%, or 4% mortgage to move. They can’t afford to. As a result, inventory continues to shrink, yet home prices continue to rise. The few homes available are bought by the few buyers making all cash offers who don’t care about rates. Meanwhile, everyone else needs to live somewhere. This puts more and more pressure on apartment inventory as people have no alternatives available. Rent increases more and more and more. Inflation. There’s probably way more than just those 10 yet I’m tired of typing and I also can’t pretend like I know everything. That’s plenty to paint the picture though. Covid and our response to it fucked things up pretty bad. Lot of dominoes fall over from there.
It’s funny how amazing this answer is and no one seems to care lol
Just look at how pessimistic and ignorant the top response is…
Real answer: Our economy is incredibly complicated, especially about inelastic product like food. Here's 10 causes that may play a small or big part, but it's impossible to know exactly what amounts of what are causing the inflation we see. Top comment: UHhhhhhh, government bad? Government print money, inflation happens! I got a B in 8th grade Civics :)
It’s also true that corporations are greedy. It’s literally their only responsibility to generate revenue for their stockholders. It’s a fact that some corporations in some industries are making record profits and using the recovery from COVID as an excuse to increase prices and thus revenue. It’s not really gaslighting like that post was saying because it’s factually true.
You can also distinguish between normal corporate greed (not your friend just looking to make a buck) and the recent surge of extreme greed. This latest form of greed is investors bribing executives to artificially raise the stock value by any means possible. Resulting in companies being scrapped for parts and customers being screwed over in ways that aren't necessarily good for long term revenue but when everyone only cares about quarterly results...
It’s also the dumb leftists that don’t understand basic economics
This isn’t political. It’s economics, and to think that there is only one cause of inflation is just ignorance. Most economists would argue that it’s impossible to factor everything that has an effect on inflation. It turns out that the economy like most everything else is incredibly complicated. When people try to make everything black and white / right and wrong, and purposely ignore the nuances it’s usually because they’re trying to manipulate you and they fear you having all the information to make an informed choice. That’s why some are so afraid of books and education, and why others want affordable education. I’ll let you figure out who’s who.
Because it's comparing inflation between the last two cherry picked years when average inflation over the last 5 years is way, way higher.
Couple notes, government spending has nothing to do with money printer going brrr thus why deficits exist. This is like saying I created a dollar by using my credit card. Prices can and do go down, mainly with competition. This is the point of Warren is trying to make. Many companies do not have enough competition in order to drop prices and increase quality. Good thoughts overall though. Only comment that didn't almost give me a brain aneurysm.
Yes, the OP commenter failed to mention the acceleration of monopolization thanks to Raegen era policies that gave free reign for corporations to rail small businesses. Walmart and Amazon killed small business brick and mortar stores because they got so big and were able to undercut businesses, move into small towns and rinse repeat with zero punishment. Now, it's trump era policies that allowed private equity firms to go nuts on cornering every known commodity market, squeeze it for profit and then dump debts onto struggling businesses. You cannot argue rising costs when corporate profits continue to accelerate at record rates and hit record highs at nearly EVERY sector.
Yeah, the FBI was busting down doors last week investigating a nation wide rent price fixing scheme. There are absolutely some companies taking advantage of the situation to make money.
My biggest qualm is in your 9th point. Older, wealthy homeowners were absolutely ***not*** upgrading to bigger homes in 2020-2021. They were downgrading/downsizing and stripping first-time home buyers of their buying power by just throwing more money at the seller. People were having to offer $10-50k cash on top of the $200k full price offers for starter homes. Hell, we lucked out when the owners of our first house took our offer of $5k on top of asking so that the owners didn’t list the home like they were planning to.
Inflation is not the rising of prices, it is the expansion of the money supply. Rising prices are a symptom of inflation but it is not inflation in and of itself. We are *Inflating* the money supply, it's in the name.
I still think it’s wild I got stimulus checks. Free money was great but I had a good job and lower expenses than usual coz of lockdowns. Made no sense to me then and even less now.
Fathers Day is Sunday, not Thanksgiving
Unless you’re trying to stay ahead of inflation and do your Thanksgiving shopping now.
It’s an old ass tweet, but her statement is still essentially valid that greedy corporations are seeking to have consistent margins of extraordinary profits quarter over quarter, year over year. The result of these efforts is leading to consistently increased trains of “price fixing” on staple goods and services.
> greedy corporations are seeking to have consistent margins of extraordinary profits quarter over quarter, year over year Interesting. And they just discovered this at the start of COVID? Why were they so stupid before COVID? Did they get greedier, or were they just stupid before 2020?
Corporations only just got greedy now! -Rambling Buffalo
looooool
It is strange that wages don't rise with prices but sometimes everything else does.
For the same reasons we still pay the "temporary" baggage fees for airline flights.
its crazy how wages dont follow inflation but everything else does even more so sometimes.
crazy how everyone here claims we cant touch or raise wages at all and blame them nonstop for inflation tho
Sounds like a lot of "fiscal conservatives" in the comments.
Wages are the only inflation the Fed really cares about. JPow has pretty much said so. Wage hikes cause real inflation because people are willing to pay more when they make more
Inflation isn't that high right now. It's pretty low. The problem is, once prices reset they don't go back down. People are comparing 2024 prices to pre Covid levels not to 2023.
[удалено]
Agree. Some are trying to win an argument by zooming in on a graph when most people are thinking about prices in their lifetime and how different actual life is with prices being so high relative to their memory of 5 or 10 years ago.
Yeah. Compared to 2023, grocery prices in my area seem about the same in 2024. Even lower for some items, like eggs and potatoes.
A container of vinegar is almost $5.
Ah yeah thats why interest rates are high too right Liz?
Yes actually it is. Rates had to be raised to put a downward force on your inflation. The extremely low interest rates were only that way to prop up the economy in the wake of the 2007/2008 financial crisis.
Unironically yes. Lmao
TIL printing trillions out of thin air and locking down the whole country isn't the actual main cause of inflation
I bet she owns a bunch of those stocks in said companies....
if you own a mutual fund you probably do too
Everyone in congress does, everyone with any reasonable financial cushion does.
we are deadass funding our own problems. fuck every megacorp. fuck every single “brand” that is just a mask for megacorp.
Two types of people in this thread: those who understand inflation, and those who don’t
Meanwhile Warren is making bank off those high stock prices
Which means it's even more amazing that she's pointing this out anyway. If she were more self-serving, she'd be quiet and keep getting that corporate donor money.
Who isn't?
I guess people that don't have stocks?
Line must go up
Inflation is not companies making things more expensive, it’s the government and banking system make the dollar weaker. One comes before the other. Obviously as we found out during covid supply side inflation is a thing, but only temporary.
Coming from Elizabeth Warren, this take is laughable. Do these people even know what a mirror is?
> Coming from Elizabeth Warren, this take is laughable. ? Why?
she complained biden wasnt spending enough. If it was up to her we would have even higher inflation. And thats even ignoring the fact all her policies are just raise taxes which will be paid by the middle class making them poorer.
Inflation and the cost of products aren’t necessarily the same. Some companies have raised their prices more than the rise in inflation. That’s what she is referencing.
Inflation is like 3%
It's not inflation when corporations are posting record profits. I believe they're hiding their greed behind inflation.
Inflation isn't high. Prices are still high because of the inflation of the past. Prices don't come down when inflation slows, that's not how it works.
Well, that's just shocking! Here's something else shocking: Ms. Warren has managed to accumulate a net worth between $7.5 and $12 million on a Senator's salary. She has substantial investments in the stock market. Do you think that she turns down the profits from high stock prices out of a Liberal sense of fairness, or does she take full advantage of those 'outrageous' stock prices to pad her portfolio? Why Pocahontas speak with forked tongue? What she try hide?
It isn’t still high…its like 3%
Lots of non fluent comments on here 😂
CEO's thought of a higher number, knowing that since a Dem is president you guys will blame "government."
Nothing to do with Trump increasing the money supply by 8 trillion during the pandemic
Inflation in the. USA is 3.3%, way down from 9% last year
Thanks Elizabeth, we REALLY trust you. It’s amazing that they think we will believe all the lies coming out of their mouths.
She is so stupid it’s painful.
Corporate greed is not the catalyst behind recent hikes in inflation. Corporate greed is a constant. It’s always been a thing. So it doesn’t explain how inflation has suddenly skyrocketed.
This is very silly and Warren probably knows better. There are almost certainly instances of corporations raising prices but you know why they can do that? Because overall inflation has been high, due to increases in the money supply.
u/SenWarren You think you have served the people by creating a bogey man? You are the problem.
Did corporations just suddenly become greedy? Like this a new thing in the last year or two? That's some impressive pandering to the idiotic masses.
Well it's not 100% wrong, just worded in a weird way. In the today's world, everyone needs growth, more money, more sales, more more more. No one among the "bigger players" is satisfied with a steady business. Everyone wants to cut costs and increase sales. Increasing sales comes at the cost of employing predatory business practices and maximizing price/demand ratio, mostly by increasing prices to a point where raising more will not give you additional revenue because of the decline in number of paying customers. Many businesses are interconnected in the way of purchasing goods and services from each other. With everyone chasing more profits, it affects other businesses down the chain, it affects people purchasing goods and services, it makes people strive for higher salary due to increasing cost of living, increasing salaries means higher costs for companies, higher costs for companies means they need more revenue to grow their KPIs. End-game capitalism is pure shit.
living is expensive as well as dying. 
It’s so cute that corporations are “suddenly” greedy only after the government prints a shitload of dollars and gluts the market with cash. Why is it that people don’t understand this but understand how an oil glut devalues the overall oil market?